Preliminary work on CCUS in China has focused on the power sector, though capture in the power sector is technically challenging, energy-intensive and expensive. Recently however, the Centre for Low Carbon Futures (UK), with the Energy Research Centre of the Netherlands, the Chinese Academy of Sciences and Azure International (Beijing), have collaborated in a project to identify low-cost alternatives for CCUS in China.

As an integral part of the production process, certain non-power industrial activities often have high-purity off-gases of CO2. The CO2 emissions from coal and gas-fired power plants normally have a CO2concentration in the flue gas of between eight to 15 per cent, whereas certain industrial processes such as hydrogen, ammonia and methanol production can have CO2 concentrations of between 50 per cent to almost 100 per cent. As the capture step of CCUS projects with low concentrated flue gases entails the highest cost both in terms of initial investment and operating costs, certain industrial processes represent potentially interesting business cases. Furthermore, low-cost ‘early opportunity’ CCUS projects within industry can result in technological learning and the development of best practice, which may contribute to reducing costs for projects in the power sector and other industries.

The International Energy Agency (IEA)/United Nations Industrial Development Organization (UNIDO) cost-optimization models have calculated that capture from high-purity industrial sources should account for 750 MtCO2/yr globally by 2050. China is estimated to account for up to 120MtCO2/yr or about 16 per cent of this potential. The IEA/UNIDO further estimates that a total global investment of US$220 billion is needed for high-purity CCUS, including transport and storage. Accordingly, the required investment for CCUS in China up to 2050 may be expected to be in the order of US$35 billion. In 2011, China with support from the Asian Development Bank (ADB) presented a preliminary study for a national CCUS roadmap. The study recommended the prioritization of industrial high-purity CO2 sources with enhanced oil recovery (EOR) for initial full-scale demonstration project development.

The primary objectives of the project introduced above, was to identify individual point sources of CO2 which could be considered for involvement in a fully integrated CCUS project. For practical purposes, the consultation focused on one province in central China, Shaanxi. The third largest fossil fuel producing province in China, Shaanxi is an important refining and chemical production hub for the nation. The large deposits of high-quality coal in Shaanxi mean that a large industry based on the conversion of coal to high value chemical products can be sustained well into the future. This combination of factors also means that the province has significant sources of high-purity CO2 to develop low-cost CCUS demonstration and commercial projects. Shaanxi also has a number of large oil fields in operation.

A detailed site-by-site inventory of potential high-purity sources has been completed, collecting information about the production characteristics and emission volumes of individual chemical plants in the ammonia, methanol, hydrogen, ethanol and dimethyl ether sectors in Shaanxi. The project team identified 22 high-purity (>95 per cent CO2) CO2 sources within the sectors, which together release almost 63MtCO2 per year. Nine of these sources are within 150km of a suitable location for EOR, with the storage capacity in the region estimated at 200MtCO2. The main EOR sites in Shaanxi Province are the Yanchang Oilfield and Changqing Oilfield.

Initial costs estimates, based on international literature, have been calculated for a small selection of potential CCUS projects in Shaanxi. Including compression and dehydration, transportation (approx 150km pipeline) and injection, an initial price range of 22-27 $/tCO2 has been calculated for two methanol projects. Calculating the benefit generated through EOR requires further site-specific details, however it is understood that at oil prices of $100 per barrel, EOR projects can remain viable using CO2 delivered at costs between 40-45 $/ton (Advanced Resources International, 2011). Dependent on the costs associated with site characterization, risk assessment and long-term monitoring, a business case for CCUS in China could be in sight.

For further research, after engaging with the relevant actors, a site-by-site technical survey of both sources and sinks should be conducted to assess potential technical barriers and to improve cost estimations in order to further refine the selection of identified CCUS demonstration projects from non-power industrial sources in Shaanxi Province.

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